Economists polled by Bloomberg had forecast a 0.7 percent increase, to 372,000 units.

Median home prices also declined during the month, falling roughly $5,000 to $232,600.

Deutsche Bank's Joe LaVorgna noted that part of the problem stems from the drop in housing starts since the financial crisis began in 2007.

"The lack of building means it is doubtful we can see a sustained rise in home sales even toward the higher end of their range," he says. "However, based on the National Association of Homebuilders' housing market index, we expect this situation to change over the next couple of years."

Regionally, sales were hardest hit in the Northeast and South, declining 60 percent and 8.6 percent, respectively. The West and Midwest improved in June.